California builds most houses since 1986, but shortage continues

Approximately 191,866 new homes and apartments were built in California in 2003, the most houses since 1986 and the most apartments since 1990. But according to officials, the increase isn’t enough to ease the state’s housing shortage.

More than 220,000 new residences need to be built each year between now and 2020 to handle California’s annual population growth of 600,000 and to overcome the past decade’s slow construction rate. Most of the new construction started this year occurred in densely populated areas between San Diego and Riverside counties and in the San Francisco Bay area.

Newhall Land and Farming Co. recently received a major contract to build one of the last large housing projects in Los Angeles County. The company will build a 20,885-home development over the next two decades.

Although the new construction has largely been sparked by extremely low interest rates, the median price of a single-family home in California is $369,500, largely due to land shortage. According to the California Association of Realtors, the number of state residents who can afford to pay that much for a home has dropped 25 percent. This has resulted in an influx of renters and a lack of available apartments.

Many contractors have started to look to legislation to help aid the construction of housing. Legislators have been pressed to approve mandatory zoning for a 20-year supply of houses, as well as grant lower fees and reform state environmental laws to make the state more construction-friendly. Many builders hope that by reforming the California Environmental Quality Act, building new housing projects in older, urban areas will be easier.

Some contractors are also hoping that California Gov. Arnold Schwarzenegger will support legislation that will make it easier for builders to clean up abandoned industrial sites for housing. Home builders and construction groups, such as the Associated Builders and Contractors, have been strong supporters and contributors to Schwarzenegger, whose policies have been viewed as pro-business and pro-construction.